Expanded Anti‑Money‑Laundering Rules

Summary#

This is a proposed set of changes published in the Canada Gazette, Part I on November 30, 2024. The package would change the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations and the related administrative penalties rules to tighten anti‑money‑laundering (AML) controls and expand which businesses must follow them. The government is asking for public comments for 30 days (until December 30, 2024).

What it does#

• Adds new reporting by traders to the Canada Border Services Agency (CBSA) about imported or exported goods to help detect trade‑based money laundering (TBML).
  • Gives the CBSA powers to compel documents, seize goods, and apply penalties.
• Creates a voluntary, but regulated, private‑to‑private information‑sharing framework for businesses regulated under the PCMLTFA.
  • The Office of the Privacy Commissioner (OPC) would review and approve “codes of practice.”
  • FINTRAC would comment on those codes.
• Requires reporting entities to notify Corporations Canada of material discrepancies between the beneficial‑ownership information they hold and what a company has filed — but only when the reporting entity finds a high risk of money laundering or terrorist financing.
• Brings new business types into the AML regime as “reporting entities”:
  • Factoring companies (rules include identity checks and records; receipts for payments of $3,000 or more).
  • Cheque‑cashing businesses (would be treated as money‑services businesses; ID and records for cheque cashing of $3,000 or more).
  • Financing and leasing entities (covered for business leasing, passenger vehicles, and consumer items worth $100,000 or more; identity checks and payment records required).
• Extends routine FINTRAC reporting duties (for example, cash/virtual‑currency reporting of $10,000 or more) and adds penalty ranges for non‑compliance.
• Proposed timing: most measures would come into force on October 1, 2025; the information‑sharing rules would be available immediately on publication in Canada Gazette, Part II.

Who's affected#

• Businesses directly added to the regime: factoring companies, cheque‑cashing businesses, and financing and leasing entities (the government estimates about 865 new reporting entities).
• Traders, carriers, customs service providers and others involved in cross‑border trade (about 272,060 entities in scope for the goods‑reporting rule).
• Existing reporting entities already regulated under the PCMLTFA (about 25,497).
• Small businesses: the government estimates 134,363 small businesses would see some impact.
• Government agencies that would implement and enforce the rules: CBSA (estimated TPV cost $505,000 over 10 years), FINTRAC (about $3.3 million), Corporations Canada (about $2.7 million), and the OPC (about $3,000).
• Overall estimated cost to businesses and government: total present value $74.3 million over 10 years (about $10.5 million annualized). The report says many of the benefits (like fewer criminal proceeds being laundered) are hard to quantify.

If it is unclear who will be affected in a specific case (for example, whether a particular leasing arrangement meets the definitions), the proposal acknowledges some thresholds and exemptions and says guidance will be issued.

Why it matters#

• The package aims to close gaps that the government and international reviewers have flagged — especially trade‑based money laundering and some financial services that were not previously covered.
• It is intended to strengthen Canada’s compliance with international standards set by the Financial Action Task Force (FATF) and to prepare for Canada’s next FATF evaluation in 2025–26.
• For businesses, it means more record‑keeping, identity checks, and possible registration or reporting duties — with associated costs and penalties for non‑compliance. Small and medium firms were specifically estimated to bear significant portions of the cost.
• For everyday people, the changes are meant to make it harder for criminals to hide illicit money through trade, cheques, leasing, factoring and similar services — which the government says protects the economy and national security.
• This is a proposal, not final law. Public comments are open for 30 days from the Canada Gazette publication (November 30, 2024).